The Obama administration, the congressional Democratic leadership, and their Liberal base have made a tactical decision to demonize health-insurance profits as part of their drive to force ObamaCare upon the United States of America.

In the heated words of a great and pissed-off American, Rep. Joe Wilson (R-SC), “You Lie!” But mendacity is something that Americans have come to expect from the Leftists.

Let us look at the Market Caps and the Net Profit Margins of the segments of American industry that are related to healthcare. Let’s see where these supposedly obscene profits actually are.

From Yahoo Business – Quarterly Results as of October 9, 2009, limited to Healthcare Industry Segments:

Industry

Market Cap

Profit Margin

REIT – Healthcare Facilities *

$27.65B

28.00%

Drug Manufacturers – Major

$1018.30B

17.00%

Healthcare Information Services

$16.59B

9.00%

Home Health Care

$6.27B

8.90%

Drug Delivery

$16.05B

8.90%

Medical Instruments & Supplies

$211.48B

8.80%

Medical Laboratories & Research

$30.50B

7.80%

Biotechnology

$229.65B

7.00%

Drugs – Generic

$10.52B

6.50%

Drug Manufacturers – Other

$158.68B

5.10%

Accident & Health Insurance

$38.83B

4.00%

Health Care Plans

$87.31B

3.30%

Hospitals

$15.14B

3.10%

Medical Equipment Wholesale

$12.44B

3.00%

Insurance Brokers

$39.36B

3.00%

Drug Related Products

$13.48B

2.80%

Specialized Health Services

$16.02B

2.60%

Drug Stores

$94.37B

1.70%

Medical Appliances & Equipment

$122.48B

1.50%

Drugs Wholesale

$66.60B

1.20$

Medical Practitioners

$424.91M

-0.30%

Long-Term Care Facilities

$6.70B

-3.80%

Diagnostic Substances

$12.31B

-5.60%

NOTE: REIT is an abbreviation of Real Estate Investment Trust. It is a tax designation for a corporation investing in real estate that reduces or eliminates corporate income taxes

As is usual and expected, reality does not bow to the will, whims, and/or delusions of President Obama and his Liberals. As you can see, those segments of the Healthcare industries that deal with health insurance operate at a mere 3 – 4% profit margin. I don’t think any sane person would consider 3 -4% as an obscene profit margin; most would consider it pathetic and wonder how and why the industry continued to exist.

Look at the bottom of the table and see what healthcare industry segments are failing. It’s not pretty and it will eventually hurt America severely.

Obama and his Liberals’ phantasmagoria also run afoul of the issue that health insurance makes up only a tiny fraction of the whole of the healthcare industry. The combined Market Cap of the health insurance segments are only $165.5 billion, which is a tiny 1.4% of the $11.47 Trillion – yes, Trillion – Healthcare industries’ total. It is unlikely to have much of an effect on the overall pricing of healthcare in America.

It’s easy to see where the obscene profits are and what is driving the increase in healthcare costs. Sadly, Obama and his Liberals are more interested in nationalizing health insurance than they are in real reform.

McGuire’s compensation was so large as to take a measurable part of this large company’s net income (5%). Or to look at it from a stock-holder’s (and hence, an company owner’s) viewpoint, had McGuire, who is an employee, been only paid a cool million, and this money had been distributed as a dividend, it would amount to about a $0.20 per share dividend. (The current dividend is $0.03 per share.)

To look at it from a United employee’s viewpoint, had McGuire, who is an employee, been only paid a cool million, and this money had been distributed to employees, each of the 40,000 employees could have received a bonus larger than $3000.

To look at it from the viewpoint of the health care system, the $124.8 million total compensation of a single United employee could pay the salaries of 833 general internists at current typical salaries. Or the $124.8 million could run one reasonable size community hospital for a year.

Actually, you’re the one missing the point. Liberals, led by Obama, Reid and Pelosi have been blaming unseemly profits for the insurance industry as a main reason for healthcare costs. Looking at the truth, that a bald-faced and stupid lie on their part.

Are some the CEO’s overpaid? Seems like it to me, but it largely immaterial to the issue at hand – unless you’re issue is a hatred of the wealthy.

The term ‘obscene’ can mean different things to different people. In my view what is Obscene about Health Insurance Company profits is how they are made … by denying people their health care.

My insurance company is CIGNA … often cited as the most vile insurance company for people dying on their watch, and what not. Last year their revenue was $4.4 Billion with profits roughly $220 Million, about 5% which is close to what your table shows. Now, if we take into account bonuses, perks and the like, these profits would be substantially higher, but lets keep focused on the books.

My argument is that these profits are MORE than sufficient to actually cure people of their ailments, but they refuse. Just look at Nataline Sarkisyan, her procedure would have cost pennies for them, but she was denied treatment and died at the ripe age of 17. There are countless situations like this, and what bothers me most is that the insurance companies aren’t liable for the deaths they cause. This, in my opinion, is what is obscene about their profits.

While a government solution may not be the ideal option, it can’t possibly be worse than what we have now. I have been repeating this often over the past few months … why not run a poll in any western European country asking its citizens if they would give up their current ‘free’ healthcare for the US system … if you get a 25% response in favor of the US system I would be surprised.

Firstly, my apologies for the delay in your comment being posted; the number of links in it set off my spam filter and I didn’t notice things right away.

Secondly, my apologies for the further delay in responding to the comment. I’m afraid that I’ve suffered from an attack of life over the last few days.

Anyway…

I can certainly understand your anger at the health insurance companies. You’ve bought the line that the Liberals have been selling you. But then there is the factual data from the AMA itself on the rates of claims denials and the listed reasons for them.

According to the AMA, CIGNA only denied 3.44% of claims, whereas Medicare – a government solution – denied 6.85%, a higher percentage of claims than were denied by any of the ranked private insurers.

Interesting chart. I don’t know about the lying, though. I have seen more lies about healthcare coming from the Right (death panels, pulling the plug on granny, etc.) than from the Left. I suppose there may be some non-symmetric sensitivity, but I think it’s a stretch to call the GOP honest in its messaging.

When Obama and the rest of the Leftists predicated the bulk of their argument for quasi-nationalizing (as a start) the health insurance industry on a false premise and willfully kept repeating these outright falsehoods, it’s not “non-symmetric sensitivity;” It’s lying, and no amount of Orwellian TrueSpeak can change that.

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